The Morning Ledger: After Years of Slowdown, Europe Inc.’s Growth Beats U.S.

Good morning. Europe’s largest companies are on track to record their strongest quarter of profit growth in almost seven years, benefiting from something the continent hasn’t seen since before the global economic crisis: a willingness among consumers—and other companies—to spend again, Eric Sylvers writes.

The first-quarter numbers are raising hopes that the continent is poised to finally shake off the legacy of the global economic crisis that began in 2008 and that has weighed on Europe much longer than on the U.S. or Asia.

Corporate earnings are riding Europe’s broader economic tailwinds. Unemployment rates in the eurozone and its biggest members have been falling gradually in recent years, emboldening consumers who had already been paying down debt and freeing up spending money.

Akzo Nobel goes to court. Akzo Nobel NV’s shareholders are challenging its decision to reject rival PPG Industries Inc.’s offers by dragging it to court today. The hearing could influence PPG’s decision on whether to pursue a hostile takeover.

Eurozone, IMF talk Greece.Eurozone finance ministers and the International Monetary Fund will seek a deal on Greek debt relief that balances the IMF’s demand for a clear “when and how” with Germany’s preference for “only if necessary” and “details later,” Reuters reports.

BMW AG hit by another U.K. strike. The German car maker faces another strike over planned changes to its defined-benefit pensions. The Unite union expects around 3,500 workers will take part in the strikes which will last until Wednesday, the Financial Times reports.

THE WEEK AHEAD

President Donald Trump walks with Treasury Secretary Steve Mnuchin as they look at portraits of the previous secretaries of the Treasury, Washington, D.C., U.S., April 21, 2017.

AP

Trump administration presents budget plan.The White House on Tuesday will roll out a budget proposal crystallizing the president’s priorities in a blueprint that calls for large cuts to social safety-net programs such as Medicaid and food assistance while increasing Pentagon and border-security spending.

U.S. new-home sales.U.S. new-home sales rose for the third consecutive month in March. Economists expect new-home sales to have dipped 1% month-on-month to a seasonally adjusted annual rate of 615,000 in April.

IHS Markit’s survey of purchasing managers could answer some questions about the state of the eurozone economy on Tuesday. The composite PMI is expected to have fallen slightly to 56.6, from 56.8 in April, which was a six-year high.

The Federal Reserve will release minutes from its May monetary policy meeting on Wednesday. The Fed held interest rates steady at the May meeting, but it has indicated it intends to raise rates twice more this year.

The National Association of Realtors’ will release its April report on U.S. existing-home sales on Wednesday. Economists expect existing-home sales declined 1.1% to an annual rate of 5.65 million.

Forecasters expect only a small revision to the first-quarter U.S. gross domestic product growth figure of 0.7% reported in April when the Commerce Department releases its second estimate on Friday. The report will include data on corporate profitability which could indicate how businesses are faring amid relatively weak energy prices and a strong dollar.

CFO JOURNAL EXCLUSIVE

Auditor rotation rules make ABB switch.ABB Ltd., the Swiss automation and robotics company, said on Monday its board plans to appoint KPMG as its external auditor, effective 2018. The move comes after the implementation of the European Union’s Audit Directive and Regulation in June 2016 which stipulate auditor rotation with mandatory retendering after 10 years and a maximum tenure of 20 years, Nina Trentmann writes.

“This decision was taken following a yearlong comprehensive external-auditor tender process initiated in 2016 in line with international good governance practices,” a statement by ABB read. The KPMG-appointment is subject to shareholder approval at the firm’s 2018 annual general meeting. ABB has been audited by Ernst & Young since 2001.

CORPORATE NEWS

Jim Hackett, currently chairman of Ford subsidiary Ford Smart Mobility, is set to take on the CEO post at the auto maker.

AP

Ford gets a new CEO. Ford Motor Co. will replace Chief Executive Mark Fields with Jim Hackett, the former head of office-furniture maker Steelcase who joined the auto maker in 2016 to explore new ventures in ride hailing, car sharing and self-driving vehicles.

Huntsman, Clariant to merge. Huntsman Corp. and Switzerland’s Clariant AG have struck an agreement to merge in an all-stock deal. The combination could create a chemicals company worth $14 billion.

Airbus sets up new compliance unit.European plane maker Airbus SE has established a new compliance review group led by outsiders amid allegations of corruption being investigated by British and other fraud watchdogs.

Arconic vote to test power of activist investors. Arconic Inc. shareholders on Thursday will vote to fill five seats on the company’s board. Some candidates are offered by the company, others by Elliott Management Corp., the activist investor that’s pushing for big changes. The new board will select the company’s new CEO and outline its strategy going forward.

Subaru wages bet on staying small.Unlike other automakers, Subaru Corp.’s survival tactic is to stay small. It isn’t planning to increase output. The Japanese company also isn’t going to build its own self-driving car because it believes that many of its customers will still want to drive their own car.

Cathay cuts 600 jobs. Cathay Pacific Airways Ltd., one of Asia’s largest airlines, said it would lay off about 600 people as it grapples with tough competition and bad bets on oil prices, despite robust travel demand in the region.

LeEco founder steps down.The billionaire founder of Chinese technology and entertainment company LeEco Holdings is stepping down as chief executive of its listed video unit after an investor had called for stronger corporate governance.

REGULATION

A migrant worker carries sugarcanes stalks at a market in Shanghai, China, March 10, 2009.

Reuters

China ups taxes on sugar imports. Beijing is nearly doubling its tax on some imported sugar—further weighing on one of the worst-performing commodities of 2017. Saying that an investigation had found that imports have seriously damaged China’s sugar industry, the Ministry of Commerce said the tax on imports beyond the first 1.95 million tons a year will be raised to 95% from the current 50%, effective immediately.

Banks hope to offer short-term loans again.Financial firms want to return to offering short-term, high-interest loans after Obama-era rules made it harder for them to do so. Trade groups including the American Bankers Association and the Consumer Bankers Association recently proposed to Treasury Secretary Steven Mnuchin several steps they say would encourage banks to offer such loans.

Virginia man charged in fake Fitbit takeover offer.The Securities and Exchange Commission and the U.S. Attorney’s Office in New York accused Robert W. Murray of buying call options on Fitbit stock and almost immediately filing a fake notice that a Shanghai-based company intended to launch a bid to take over the company.

EARNINGS

Deere raises income forecast.Farm machinery-equipment maker Deere & Co. raised its earnings forecast to about $2 billion for its fiscal year ending Oct. 31. The company posted a profit of $802.4 million in its second quarter, a 62% jump from a year earlier.

ECONOMY

China seeks private capital for state-owned firms. In an effort to make its bloated state-owned energy sector more competitive, China said it would inject more private investment into its oil and gas enterprises and consider cutting the industry’s vast work forces.

Big tech’s not-so-easy money.There are some things even half a trillion dollars can’t buy. One of those is freedom from Washington politics. Tax overhaul promises from the Trump administration had lit up tech investors eyeing a rather large purse. The dim prospects for such a deal now had a noticeable effect in the selloff last week.

YRC Worldwide Inc., an Overland Park, Kan., holding company of freight-shipping brands, named Stephanie Fisher finance chief. Ms. Fisher has been the company’s acting CFO, vice president and controller since January. She will receive a salary increase to $400,000 a year after her promotion.

The Morning Ledger from CFO Journal cues up the most important news in corporate finance every weekday morning. Send us tips, suggestions and complaints: kimberly.johnson@wsj.com.